Cryptopia, the New Zealand-based cryptocurrency exchange that went into liquidation last year, updated its stakeholders on its dissolution process.
The exchange confirmed via Twitter that its directions heading had been moved behind. Per the tweet, the hearing- which was initially scheduled for February 3- will now hold between February 11 and 14 at the Christchurch High Court.
The #Cryptopia directions hearing has been rescheduled to 11-14 Feb @ Christchurch High Court. We are seeking directions about the legal status of customers’ holdings & the ability to hold Cryptocurrency on trust. All Liquidation info can be found here: https://t.co/qtQ7dvcUtc
— Cryptopia Exchange (@Cryptopia_NZ) January 17, 2020
Fighting to Stay Afloat After a Hack
Last year January, The New Zealand exchange shocked investors in a tweet announcing that it had detected a major security breach with “significant losses.” While users had noticed that its services were down, the company tried to allay fears by claiming it was conducting scheduled maintenance and would be up again soon. However, it cleared the air later, explaining that hackers had gotten through its security protocols and made away with customer funds.
15,750 AU were stolen from @Cryptopia_NZ , cryptopia knew this but hide it from their customers, we asked them to publish this. They refused and lied to their customers. How do you call this? SCAM! Check in Google, we were the first to worn but no one believed us in real time.
— Aurum Coin (@Aurum_Coin) January 18, 2020
News of the incident was met with dismay from crypto insiders, particularly because it was the first major hack to be reported that year. A few months after the breach, the exchange resumed operations in March.
Throwing in The Towel
Sadly, all of its efforts were for nothing, as the company finally closed down in May. It eventually appointed Russell Moore and David Ruscoe from auditing and consultancy firm Grant Thornton New Zealand as official liquidators.
Grant Thornton explained at the time that the company had decided to go into liquidation, as it had struggled with returning to profitability- not particularly surprising, as confidence in the exchange following the hack would have plummeted. To help protect its staff and customers, the exchange chose to close shop. The liquidators added that they’d investigate the source of the hack and focus on securing stakeholders’ assets.
“We realize Cryptopia’s customers will want to have this matter resolved as soon as possible. We will conduct a thorough investigation, working with several different stakeholders, including management and shareholders, to find the solution that is in the best interests of customers and stakeholders.”
The company added that the liquidation process should take “months rather than weeks,” adding that the complexity of the case would require some time to determine and settle Cryptopia’s obligations.
Pay attention to the Cryptopia Liquidation… your courts are trying to decide on Feb 14th if they will honor Cryptopia's PROMISE to their customers that the cryptocurrency we purchased and deposited on their exchange is held in TRUST for us!!!! – this is scary!!!
— Wesley Bauerle (@Dirtfishers) January 18, 2020
Grant Thornton definitely wasn’t joking about the time frame, as the company has been dealing with finalizing the exchange’s liquidity since then. The auditing firm gave an update on activities last month, explaining that although it had been able to return about $8 million to investors and stakeholders between May and November, there are still a lot of difficulties to be expected before the case can be done.[
“We continue to investigate the affairs of the Company and its directors in the period prior to our appointment to determine if there are any further avenues of recovery available to the Company,” the company’s report at the time summarized.